Grupo Mexico, an entity controlled by mining tycoon German Larrea, is in advanced talks to buy Citigroup’s retail banking business in Mexico, Bloomberg reported, citing people familiar with the matter.

Larrea’s conglomerate is trying to finalise the terms of a potential transaction, the sources told the publication.

An agreement between the two entities is yet to be reached, the sources said, adding that the deal may or may not materialise or another buyer could emerge.

The US-based bank could also consider launching an initial public offering (IPO) of Banamex.

Citigroup’s spokesperson declined to comment, while Grupo Mexico’s representative did not immediately respond to a request for comment.

As per the news report, at an event in Mexico City Citibanamex CEO Manuel Romo said Citi will report the sale’s results in the first quarter of 2023.

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By GlobalData

Romo also confirmed an IPO has not been ruled out.

Grupo Mexico may struggle to reverse Banamex’s decreasing market share in the face of competition from fintechs besides the risk that the president of Mexico may impose additional requirements on the buyer, the report said citing Barclays analysts.

One of the conditions laid out by Mexico President Andrés Manuel López Obrador is that new owners should refrain from mass firings.

Last month, the publication reported that Mexican commercial lender Banca Mifel has roped in Apollo Global Management and the Abu Dhabi Investment Authority (Adia) to fund a bid to buy Citi’s consumer unit.